The Problem with Downloading

Since we've established that the HD format war is probably going to wind up killing both disc formats for home video (see previous entry), the common belief is that eventually all disc formats will be replaced by downloading from some kind of legitimate video distributor, sort of like how Apple's iTunes Store works for music. It's certainly a tempting thought to make the leap from audio to video, particularly since many people seem to have climbed onto the legitimate downloading bandwagon. But there are major logical flaws to the argument "downloading will succeed DVD rental", and they all revolve around this notion of what the internet "should" be, and what the video market "should" be, and what it really is. Once you let go of those romantic notions, reality becomes astonishingly simple.

In a nutshell, downloading's not going to work until two conditions are met:

1. Adequate bandwidth
2. Familiar delivery models
   

Let's take the second point first. Last time, we discussed what killed laserdisc (no rental penetration, big discs, high price) and why DVD succeeded where it failed (familiar size, easily rentable, reasonable price). The key here is familiarity. Typical consumers don't want to learn a whole new paradigm every time the technology is incrementally improved. It just doesn't work that way - who wants to work to give companies their money? The only reason Apple has succeed where everyone else (including Rhapsody) has failed is that they made it really, really easy for the consumer. Their store is built right into their media player, which is cross-platform and easy to install and use.

But let's be honest - the Apple store (and iTunes) is very much a generational phenomenon. Young people (and I guess I'm still one of those...) find it a sensible and convenient way to purchase music legally. But I seriously doubt that older folks, including the world's largest single demographic (baby boomers) have bought into it with as much eagerness. For them, buying music means going to a store, picking out a CD/LP/Tape, talking to the clerk, maybe listening to a track and having their purchase rung up on a register. Yes, they're on the way out, but they're still the bulk of consumers.

Go into a video store on a Friday night and take a look at who's there. Is everyone 25 or under? Or are there parents with kids, couples picking out a movie to watch together on the couch and people just getting off work for the weekend? We understand what a video store is. We've lived with it for 15 years. Even my people my grandparents' age understand the business model. I simply can't see why the majority (and yes, majority does rule in the case of marketing) of consumers would abandon a model they know well for a model they hardly know at all just because some tech guru told them it was "better". Downloading eliminates the "store experience", the notion of browsing through shelves, chatting with friends you meet at the store, having something recommended to you by a human being. It seems highly unlikely that this model will change anytime soon.

Besides, downloading is never going to catch on in a big way until bandwidth is increased by an order of magnitude. Perhaps you've heard the old story of how the reservoir in most American cities is drained to dangerously low levels once each year during halftime at the Super Bowl, where tens of millions of people all flush their toilets at the same time. Now imagine a typical Friday night in New York or LA, where perhaps a million people would try to download the same movie at roughly the same time. If this were tried today, the internet would either crash altogether, or the download speeds would be such that a typical 7 GB DVD would be just about ready to play by the time you go back to work on the following Monday morning. (And this is not even considering the next-generation HD formats for which this hoopla is supposed to be the answer.)

Yes, I can hear the objections already: "But lots of people download using Bittorrent or Limewire!" (Peer-to-peer networks that are often unreliable and depend on sharing of files between users to artificially increase apparent bandwidth - I think we know what major record labels and movie studios think of those.) "How is this different from pay-per-view on satellite?" (Two ways: a very small install base and privately owned bandwidth delivery for which users pay a large premium.) "Apple's iTunes store seems to work fine!" (Audio requires about 1/10th the bandwidth of video - and besides, not everyone wants the same song at the same time.)

What this adds up to is a need for greatly increased bandwidth if the disc format and all it entails (video stores, etc.) is ever to be replaced. Who's going to pay for that bandwidth? The government? (Last time I checked, the right to download movies wasn't in the constitution.) Private industry? (Fine, if you want to pay $1000/movie, or some similarly outrageous price that would have to be charged to recoup the staggering upfront cost of re-wiring the world.)

The fact is that, until downloading as fast and cheap as jumping in the car and heading to the video store, it's not going to catch on. Period. As much as some would like it, as much as it seems like the elegant, 2007 solution, it's just not realistic. You can't always get what you want.

The take home message is a familiar one: DVD is here to stay.